Sanjay Kishan Kaul, J.:— (Oral)

1. Admit.

2. Learned counsel for the respondent accepts notice.

3. At request of learned counsel for the parties, the appeal is taken up for final disposal.

4. An open tender was floated by the Railway Board bearing no. CS-110/1994 in which the appellant participated and was declared successful resulting in a letter of acceptance dated 03.02.1995 written by the appellant which finally culminated in a contract inter se the parties dated 09.02.1995 for supply of 5124 metric ton of high tensile wires. The total value of the contract was Rs.9,99,18,000/-. The rates and value was subject to price variation in terms of clause 13 of the Special Conditions of the Contract . A second contract was entered into on 05.05.1995 for supply of 8741 metric ton of high tensile wires with an associate company of the appellant M/s Hind Wire Industries Ltd.

5. The appellant under the first contract supplied 98.61 per cent of the total contracted quantity and the bank guarantee furnished for performance was discharged by the respondent/Railways. However, in respect of the second contract, in view of labour problems being faced by the associate company of the appellant, a request was made on 20.09.1995 to transfer the ordered quantity to the appellant which ultimately resulted in a tripartite agreement on 30.04.1996.

6. Railways claim that the entire quantity ordered could not be supplied under the second contract and the appellant applied for extension of delivery period which was extended by six months with the stipulation that the payment would be made at a lower rate on account of price variation clause. This aspect was disputed by the appellant and was the cause of dispute which culminated in the arbitration proceedings in view of the arbitration clause.

7. The award was made and published on 15.07.2008 by Justice Satpal (Retd.) as the sole arbitrator. The arbitrator negatived the plea of the Railways that there was amalgamation of the two contracts and thus opined that the second contract remained an independent contract. Qua the first contract, supplies less being to the extent of 1.39 per cent which was within permissible limits of the contract, it was held that there was no breach. The short supplies of 758 metric tons under the second contract was held not to be attributable factor for which the blame could be laid at the door of the appellant. The arbitrator awarded various claims to the appellant amounting to Rs.1,51,78,644/- along with simple interest at the rate of 7 ½ per cent from 01.01.1999 to 30.06.2008. We may note that the date of 01.01.1999 has been treated as the date of cause of action. Future interest was granted at 12 per cent per annum both on the component of the principal amount as well as interest quantified till date of award of Rs.1,08,14,784/-. This is apart from the cost of litigation.

8. The respondent being aggrieved with this award filed objections under Section34 of the Arbitration and Conciliation Act, 1996 (‘the said Act’ for short) being OMP No.646/2008. The OMP has been partly allowed by the impugned order dated 29.02.2012 of the learned single Judge, which is sought to be assailed by the appellant on the aspect that the learned single Judge has interfered with the award. There is no appeal by the respondent. The discussion on the question of award of pendente lite and future interest is contained in para nos.21 to 25 of the impugned judgment. The plea advanced on behalf of the Railways was that interest on claim for damages could only be awarded in certain circumstances as enunciated by the Supreme Court in State of Rajasthan v. Ferro Concrete Construction Private Limited; (2009) 12 SCC 1. These circumstances are set out in para 66 of the judgment.

9. It was pleaded by learned counsel for the Railways that the contract did not provide for payment from any date interest on damages nor was such a specific claim raised. The legal notice dated 15.06.2000 issued on behalf of the a